March 9 (Bloomberg) -- The Greek government said it reached
its target in the biggest sovereign restructuring in history,
with a 95.7 percent participation rate among investors after it
received approval to activate collective action clauses.

Bondholders tendered 152 billion euros ($201 billion) of
Greek-law bonds, or 85.8 percent of the total, after the
government offered to swap their holdings for new securities
under the debt exchange. Twenty billion euros of foreign-law
bonds were also tendered, according to an e-mailed statement
from the Greek Finance Ministry.

The euro was down 0.3 percent at $1.3239 after the release
at 8:40 a.m. in Athens. Asian stocks rose for a second day.

“I wish to express my appreciation to all of our creditors
who have supported our ambitious program of reform and
adjustment and who have shared the sacrifices of the Greek
people in this historic endeavor,” Finance Minister Evangelos
Venizelos said in the statement. He is due to hold a press
conference at 1 p.m. Athens time.

With Greece again the focus of the euro-area debt crisis
now in its third year, the goal of the exchange was to reduce
the 206 billion euros of privately held Greek debt by 53.5
percent. Together with a 130 billion-euro second Greek aid
package, the writedown is a key element in European leaders’
efforts to turn the tide against the crisis that has roiled
Europe, forcing Ireland and Portugal to follow Greece in
requiring bailouts.

Forced Into Swap

While Prime Minister Lucas Papademos’s government had said
it would prefer a voluntary deal, it indicated a readiness to
use collective action clauses to force holders of Greek-law
bonds into the swap if the private sector involvement fell short
and it got approval from investors to change the bonds’ terms.
The government said it wanted participation above 90 percent and
was seeking a minimum level of 75 percent.

The International Swaps and Derivatives Association said
the determinations committee will meet at 1 p.m. London time to
consider a “potential credit event” relating to Greece.
European finance ministers will hold a conference call at the
same time to discuss the swap result.

“The market had already priced this in,” Pawan Malik,
managing director of Navigant Capital, said in an interview on
Bloomberg Television’s “Countdown” with Owen Thomas and Linzie
Janis. “There was a small possibility that for whatever reason,
the participation would be so high that the CACs may not need to
get triggered,” he said. “For the markets this may be a mild
negative today.”

BNP Paribas, Commerzbank

Greece’s largest banks, most of the country’s pension funds
and more than 30 European banks and insurers including BNP
Paribas SA and Commerzbank AG, had said they would agree to the
offer before it closed yesterday at 10 p.m. Athens time.

In the exchange, investors will receive new bonds with a
face value of 31.5 percent of the old ones together with notes
from the European Financial Stability Facility. The new debt is
governed by English law and comes with warrants that will
provide extra income in years when Greek economic growth exceeds
thresholds. The net present value loss for investors is more
than 70 percent.

The swap is meant to help reduce Greece’s debt to 120.5
percent of gross domestic product by 2020. Greece is now in its
fifth year of a recession.